1. Medicaid Managed Care Reexamined Michael Sparer, JD, PhD Professor of Health Policy and Management Mailman School of Public Health Columbia University July 10, 2008

2. 2 Source: United Hospital Fund analysis of NYS Department of Health enrollment reports: January 1995 – April 2008. ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 Managed care enrollment within Medicaid: 1995 - 2008

3. 3 TOMP CHEMTIOG CHEN CORT BROO CAYU ONON MADI LEWI JEFF ONEI OSWE HERK STLA SULL ULST ORAN DUTC PUTN WEST ROCK DELA OTSE CLIN ESSE FRAN HAMI WARR FULT SCHO MONT RENS SCHE ALBA SARA GREE COLU WASH NASS SUFF MONR ONTA STEU YATE WAYN SENE CATT ERIE GENE NIAG ORLE CHAU WYOM ALLE LIVI SCHU NEWY KING BRON RICH QUEE NY State counties by MMC status: May 2008 Mandatory Voluntary No managed care Note: Mandatory counties include those transitioning under current policy. Counties Classified as voluntary must have at least one full-capitation plan.

4. 4 Managed care penetration: adults and children Source: United Hospital Fund analysis of NYS Department of Health enrollment reports: October 2007.

5. 5 Managing care for beneficiaries with complex medical needs

6. 6 Managed care penetration: elderly and disabled Source: United Hospital Fund analysis of NYS Department of Health enrollment reports: October 2007.

7. 7 Note: Medicaid spending is from FFY 2006. Enrollment is from September 2006. Source: UHF analysis of New York State Department of Health enrollment reports and CMS 64. Managed care: 60% of enrollment and 14% of spending

8. 8 11/05: 125,000 SSI beneficiaries in NYC were mandated to enroll in MMC. 3/07: Another 35,000 SSI beneficiaries with SPMI and SED in NYC were mandated to enroll in MMC. 11/07: Five counties outside NYC begin mandatory enrollment for SSI beneficiaries. 11/08: The State plans to have phased in mandatory enrollment for SSI beneficiaries in all counties that have a mandatory MMC program. State is requiring more beneficiaries to join managed care

9. 9 All beneficiaries: Outpatient prescription drugs SSI beneficiaries: Outpatient mental health Inpatient mental health Includes stays in general hospitals with MH diagnosis Outpatient substance abuse Inpatient substance abuse Key services carved out of MMC Note: One substance abuse service, detoxification, is carved-in for SSIs.

10. 10 Which exemptions and exclusions should be removed? Can meaningful coordination of care be achieved with the current carve-outs? Should the state establish a PCCM option for beneficiaries with complex medical needs? Key Questions

11. 11 Is State oversight effective?

12. 12 Quality Assurance Reporting Requirements (QARR) Results indicate that New York’s Medicaid plans provide better care than the fee-for-service system and Medicaid plans in other states. Concerns that scores partially reflect data collection capacity rather than actual quality outcomes High rates of enrollment churning may undermine results.

13. 13 Rate-setting Old system: negotiated rates Each plan proposes new rate based on utilization and cost projections. State conducts individual negotiation with plan. New system: risk-adjusted rates State calculates regional average across five groups of beneficiaries. Each plan’s rate is adjusted from regional average based on members’ health status.

14. 14 Is QARR an effective quality improvement tool? What will be the impact of the new rate-setting system? Key Questions

15. 15 Has MMC improved the health care delivery system for the poor?

16. 16 Are health plans able to modify provider behavior? Provider profiling: ability to impact physicians’ practice is limited. Disease and care management: varying opinions over whether these programs are effective Pay-for-performance: plans are cautiously experimenting, but physicians report it has little influence on their practice patterns.

17. 17 Are beneficiaries less reliant on emergency room care? Plans are working to improve and expand beneficiary access, particularly to community-based providers. Beneficiaries still rely on the emergency room for primary care and rarely have ongoing relationship with a PCP. Comprehensive and coordinated oversight of episodes of care is still elusive.

18. 18 Conclusions Pivotal moment for New York’s Medicaid managed care program Controversial state effort to expand MMC to more beneficiaries and to all corners of the state The promise of managed care remains clear, but the challenge is to figure out how to turn that promise into reality.